India’s Economy: Steady Growth and Strength
India’s economy is growing at a good pace. It is a major player in global growth. This growth comes from strong basics and smart policies, says the Reserve Bank of India.
Facing Global Challenges with Domestic Strength
The world economy is full of uncertainties. But India’s economy stays strong. It has solid basics and careful policies.
Global Economic Issues
The RBI points out several global problems:
- Uncertain economic and trade policies
- Unstable financial markets
- High public debt
- High asset values
Stable Domestic Finance
At home, the financial system is stable. Banks and financial institutions are healthy. Financial conditions have improved due to helpful monetary policies and low market volatility.
The Financial System’s Resilience
The RBI report shows the financial system is strong. Here are some key points:
- Commercial banks have strong capital buffers.
- Bad loans are at a very low level.
- Banks have strong earnings.
- Urban cooperative banks have improved their capital.
- Non-banking financial companies are well-capitalized.
Insurance and Mutual Funds
Insurance companies, both life and non-life, have good solvency ratios. Stress tests show mutual funds and clearing corporations can handle shocks well.
Systemic Risk Survey Findings
The RBI did a systemic risk survey in May 2025. The survey found:
- All major risk groups are in the ‘medium risk’ category.
- 92% of respondents believe in the strength of India’s financial system.
- Nearly two-thirds think the global financial system is weakening.
Key Risks Ahead
The central bank identified several key risks to domestic financial stability:
- Geopolitical conflicts
- Capital outflows
- Trade disruptions
